1/07/2005 @ 6:00AM

Apple Bites The Fans That Feed It

It is widely acknowledged that
Apple Computer
enjoys the kind of slavish devotion among its customers–and fawning adoration from the press–of which other companies don’t even dare to dream. That is, it’s acknowledged by everyone but Apple.

How else to explain Apple’s
latest attempt to clamp down on, rather than embrace, its fanatical fans? CNET News.com first reported on Wednesday that the company, earlier this week, filed a lawsuit–and not its first–against a Web site called ThinkSecret.com, for publishing details of an Apple product that the Web site says will be announced by the company at next week’s MacWorld conference in San Francisco.

Make no mistake, there’s a good chance that the source of ThinkSecret’s story about plans for a $500 Mac and new business software did break whatever legal agreement not to divulge the information that they had agreed to with Apple. And, one must assume it is at least partly true, or Apple wouldn’t bother suing.

But, this sort of stuff happens all the time in the tech industry. Sources leak details of forthcoming products to reporters whose motivation is to get credit for an exclusive story. Here’s the difference with Apple: most of its secret product news is not published first by national, mainstream media, but by Apple advocates. These people are customers, fans and Apple-lovers.

This community gives Apple untold free–and mostly positive–publicity and buzz about upcoming products and strategies. They salivate over every upgrade. This is a pre-iPod gang–people who supported Apple before the second coming of
Steve
Jobs
Steve Jobs
in 1997. Consider that it was Apple enthusiasts who helped drive the market for the iPod after its 2001 release, despite a widely held perception that the $399 price tag was too high.

And, the leak certainly hasn’t hurt the company’s stock price. Since news of the cheap Macs hit on Dec. 28, two investment banks have issued bullish reports on the developments and Apple’s shares have risen 33 cents, to $64.55.

One might question whether Apple’s behavior will create discord with its famously loyal and fervent customers, especially at a time when others–most notably
Microsoft
and
Sony
–are gunning to take a chunk of its digital music business.

Those fans couldn’t have been happy when Apple boycotted the East Coast MacWorld conference last summer, when the company was displeased that the conference was being moved from New York to Boston.

Nor were they thrilled when, prior to December 2003, Apple required iPod owners to buy whole new iPods when the batteries died. After some bad press, Apple instituted a $99 battery-replacement program.

This isn’t the first time Apple has sued to uncover the source of leaks. In December 2004, it won the right to subpoena three enthusiast Web sites, which published undisclosed technical information. In 2000, Apple sued an unknown person for publishing photos of an unannounced PowerMac computer on the Internet. Also that year, News.com reported that Apple’s legal department told various Mac-rumor sites to remove information on a product that turned out to be the ill-fated Cube.

Apple’s current lawsuit alleges that “Unauthorized disclosure of product news diminishes the interest of both the mainstream and trade media in the launch of a new product.”

Huh?

Can you think of another company whose product news garners more coverage–regardless of unauthorized disclosures–from the geek and mainstream media? Apple’s products were featured not once–but twice–on the cover of Time magazine in recent years!

An Apple spokesman declined to answer questions regarding the company’s PR strategy, but in a statement said that the company’s “DNA is innovation, and the protection of our trade secrets is crucial to our success.”

Fair enough, but Apple has to be the only tech company blessed with widespread coverage of every new product, despite the lack of outbound reach by its PR team. And, much of that is due to its fans, who have created dozens of Web sites with news and commentary about Apple products, links to resources, downloads and message boards. Some of these are dedicated solely to the iPod, as there are iPod sites set up by devotees in Turkey, Spain, Sweden and elsewhere.

But, it’s not just Web sites. Anyone who has seen Jobs speak publicly will tell you it’s a little like watching the screaming teenagers react to the Beatles on The Ed Sullivan Show.

Boston attorney
Bruce
Sunstein
Bruce Sunstein
, who specializes in intellectual property law, says Apple won’t make a nickel off its case, partly because it’s hard to prove damages. But, he warns of damages to Apple’s reputation. “A fair amount of buzz doesn’t hurt Apple’s business,” he says. “And, to the extent that Apple sues its customer base; it has to think twice about biting the hand that feeds it.”